The trading market is dynamic, exciting and in many ways unpredictable. It is always changing its face and a forex trader must find a way to not only survive, but also make a living. What happens to us now when the economy went wild?
We have entered a truly troubled era. During the latest economic turbulence we are experiencing the credit market freeze all around the world. The credit chaos is not an over-night result. It is a pure outcome of overleveraging years after years, after years. The damage is enormous and we can only hope for the best.
Many of us are wondering about the trading future. My guess is that the price movements will depend largely on the attempts to reincarnate the credit market and "disengage" the global recession. Forex traders will keep a watchful eye on the Fed for the global interest rate cut. The institutions will focus on de-leveraging and forex will be the safest option not to lose money, compared to other equities, commodities and stocks. Be ready for some changes - it will take a while for the credit mess to clear up.
Have you noticed the change in bid/ask spreads and swap rates? Seems like all the spreads are much larger than they once were. I am pretty sure the gap wasn't as wide couple of month ago!
Can you see the connection between volatility, no bank-to-bank loans and wider spreads? The only way for spreads to come back to normal would require much less volatility, which depends on banks allowing credits to each other. Since a lot of financial institutions have decided to stay low there is less liquidity and therefore the spreads simply can't be as tight as they were once upon the time.
When will things go back to normal? Great question with no predicable answer, I am afraid. Let's hope that the credit freeze will defreeze soon and we can all get back to our happy trading lives.
Despite the economic mess, in my opinion, forex trading is the only safe investment opportunity. After all, if you make profits in forex, you get your cash right away - no waiting period, no ownership and a promise of money in the long run. I choose to hold cash in my hands whenever possible. Forex trading is still my number one profession.
No, it isn't just a bad dream. Wider spreads are not the only side affects forex traders have to deal with. Many forex brokers changed their interest policies and charge you regardless the direction of your position.
Let me make it clear though, that it isn't a new form of scam - your trusted forex broker isn't cheating! The problem is much deeper, behind the scenes where the big boys play. Banks are no longer lending or giving credits to each other and that is a reason for the crazy volatility you see in the market these days.
Check out more forex articles, tutorials and forex brokers reviews at http://www.forexexplore.com
We have entered a truly troubled era. During the latest economic turbulence we are experiencing the credit market freeze all around the world. The credit chaos is not an over-night result. It is a pure outcome of overleveraging years after years, after years. The damage is enormous and we can only hope for the best.
Many of us are wondering about the trading future. My guess is that the price movements will depend largely on the attempts to reincarnate the credit market and "disengage" the global recession. Forex traders will keep a watchful eye on the Fed for the global interest rate cut. The institutions will focus on de-leveraging and forex will be the safest option not to lose money, compared to other equities, commodities and stocks. Be ready for some changes - it will take a while for the credit mess to clear up.
Have you noticed the change in bid/ask spreads and swap rates? Seems like all the spreads are much larger than they once were. I am pretty sure the gap wasn't as wide couple of month ago!
Can you see the connection between volatility, no bank-to-bank loans and wider spreads? The only way for spreads to come back to normal would require much less volatility, which depends on banks allowing credits to each other. Since a lot of financial institutions have decided to stay low there is less liquidity and therefore the spreads simply can't be as tight as they were once upon the time.
When will things go back to normal? Great question with no predicable answer, I am afraid. Let's hope that the credit freeze will defreeze soon and we can all get back to our happy trading lives.
Despite the economic mess, in my opinion, forex trading is the only safe investment opportunity. After all, if you make profits in forex, you get your cash right away - no waiting period, no ownership and a promise of money in the long run. I choose to hold cash in my hands whenever possible. Forex trading is still my number one profession.
No, it isn't just a bad dream. Wider spreads are not the only side affects forex traders have to deal with. Many forex brokers changed their interest policies and charge you regardless the direction of your position.
Let me make it clear though, that it isn't a new form of scam - your trusted forex broker isn't cheating! The problem is much deeper, behind the scenes where the big boys play. Banks are no longer lending or giving credits to each other and that is a reason for the crazy volatility you see in the market these days.
Check out more forex articles, tutorials and forex brokers reviews at http://www.forexexplore.com
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